Colorado Governor opposes measures restricting drilling

DENVER, Colorado (Bloomberg) -- Colorado Governor John Hickenlooper and business leaders vowed to do “whatever it takes” to defeat initiatives proposed for the fall ballot that would restrict oil and gas drilling generating $30 billion a year for the state economy.

“These measures risk thousands and thousands of jobs and billions in investment and hundreds of millions of dollars in state tax revenue,” said the first-term Democrat at a press conference July 17 at the Denver Metro Chamber of Commerce.

The proposals, which are circulating for signatures, would amend the state constitution to require wells to be set back 2,000 ft from structures and provide communities with more control over where drilling takes place.

The debate over hydraulic fracturing has escalated in Colorado as drilling moved closer to suburbs, raising concerns about water and air contamination. Five communities in the state have voted to ban or put a moratorium on such activity.

Hickenlooper, who is running for re-election, has worked with energy companies, lawmakers and business groups since May to broker a compromise and appease activists pushing for restrictions on fracing.

Ballot Measure

He sought to head off the ballot measure that would prohibit drilling within 2,000 ft of structures -- a step energy companies say would effectively ban fracing in the state. Hickenlooper said July 16 that he didn’t have enough votes to pass a bill in a special session of the legislature allowing more community control over energy development.

“Over the past several months, we have worked with a bipartisan coalition to explore a legislative compromise that would avoid a series of expensive and divisive ballot initiatives surrounding oil and gas development in Colorado,” Hickenlooper said in a statement on July 16. “We have not been able to secure the broader stakeholder support necessary to pass bipartisan legislation in a special session.”

State regulations now require wells to be located at least 500 ft from occupied buildings. Activists are hoping to expand that barrier.

U.S. Representative Jared Polis, a Democrat from Boulder who is backing the initiative requiring 2,000 ft of space, said it’s now up to the people of Colorado to address the fracing issue. Supporters of the initiative must turn in 86,105 valid signatures of registered voters by Aug. 4 to place the measures on the Nov. 4 ballot.

‘One Goal’

“My one goal is to find a solution that will allow my constituents to live safely in their homes, free from the fear of declining property values or unnecessary health risks,” Polis said in a statement.

Anadarko Petroleum Corp., Whiting Petroleum Corp. and Encana Corp., which are drilling in the Denver-Julesburg basin, one of the nation’s richest oil and gas fields, said on July 16 they will spend $50 million to fight the measures. Drilling in the basin has helped make Colorado the nation’s sixth-largest natural-gas producer and ninth-biggest oil producer.

“Colorado is at the heart of this national debate,” said Matt Most, V.P. of government relations for Encana. “The rest of the country is going to be looking here and if we lose it will embolden challenges elsewhere.”

The oil companies are supporting a ballot measure that would prevent communities that restrict drilling from receiving state tax revenue from the business.

Hickenlooper has been leading a campaign to persuade Coloradans that mineral rights owners must continue to have the ability to collect royalties by allowing energy companies to drill.

“The 2,000-ft set back is not in any measure about local control,” he said at the press conference. “It imposes an arbitrary limit throughout the entire state and provides no room to adjust based on local reality.”